Offshore outsourcing hits IT pros in the paychecks

by Ed Parry, SearchCIO.com News Editor

Offshore outsourcing, the hot trend in IT, is cooling down some hot skills. New research shows that offshore outsourcing has devalued some certifications this year, while some "certs" are actually making their owners richer.

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Top paying certifications (as a percent of base pay through Q2 of 2003):

Project Management Professional (PMP) (16%)

Certified Information Systems Security Professional (CISSP) (11%)

Citrix Certified Enterprise Administrator (11%)

Master Certified Novell Engineer (Master CNE) (11%)

Oracle Certified Professional Database Administrator (OCP DBA) (11%)

Source: Foote Partners LLC

Fresh research from Foote Partners LLC's latest Quarterly Hot Technical Skills and Certifications Pay Index shows that the offshore outsourcing trend has finally started to eat into the value of IT certifications.

The bonus premium pay that comes with some IT certifications had actually stood tall through the horrors of the 2001 and 2002 economies, whereas standalone skills paid less and less. In fact, certifications helped IT pros actually increase their incomes, while other workers saw their pay plummet, according to David Foote, president and chief research officer for the New Canaan, Conn.-based consultancy.

But 2003 has been a different story. "The Certified" are now starting to get their reality checks.

The bad news

Crunching numbers from 57 certifications, 36,000 IT pros and more than 1,800 North American and European firms, Foote found that the overall premium bonus pay for certified IT workers fell 4.1% in the first half of 2003 and nearly 6% over the past 12 months. Overall, those hot certs will now get you an average bonus of 7.7% of your base salary. Bonus pay for standalone skills decreased another 5% to 6.7% of base salary.

Some certification-related bonuses dropped more steeply than others. Leading the way downhill were webmaster/Internet certs (bonuses dropped 13%) and beginner certs, like the Microsoft Certified Professional (MCP), Certified Computing Professional (CCP), and CompTIA PC Technician (A+) (down 13.6%).

As a group, database certifications, such as the Oracle Certified Professional and Microsoft Certified Database Administrator, continue to draw the best bonuses, averaging nearly 10% of base pay. Still, certified DBAs could be making more -- their bonuses have decreased on average nearly 15% in the last 12 months.

Where did the money go? Look overseas. Foote said that offshore outsourcing has a lot to do with the thinner paychecks.

"These are monies that have traditionally been used to retain and motivate workers," he said in a statement. "As more work is transferred offshore, premium pay becomes unnecessary."

Offshore outsourcing could make some jobs unnecessary, too. Last month, Stamford, Conn.-based Gartner Inc. announced that one in 20 IT jobs will head offshore by the end of 2004.

The good news

If you've got certifications in project management, security, systems administration, and network operating systems, go ahead and add that sunroom to the house. Foote's research shows these skills, including Linux and Unix and Windows security certifications, increased from 13% on up to 25% in value over the last year.

Foote also predicts that Web services, voice over IP, SAP/ABAP and storage certifications will be more in demand over the next 12 months.

As far as standalone skills go, security skills with project assignments (such as those involving customer relationship management and data warehousing) have paid the best bonuses through the first half of this year (14% of base pay), followed by XML (13%), rapid application development and extreme programming skills (12%), Microsoft SQL Server and Oracle database skills (11%), and Linux skills (9%).

On the other end, pay for skills in messaging and groupware, networking, application development, programming languages and enterprise applications have taken the steepest tumbles -- bonuses for these skills were down as much as 8.3% in the first half of 2003.

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